5 Most Common Questions Regarding Canadian Personal Tax Returns

Well the rush of tax season is essentially over.  There will still be personal tax returns coming in over the next few months but the April 30th deadline is now passed.  When considering all the activity over the past couple of months it’s interesting to reflect on the 5 Questions most frequently asked when reviewing personal tax returns with clients.

Question 1) – I owe money and my spouse (partner) is getting a refund. Will the CRA just send the difference?

Answer – No, they will not net the amount.  The personal tax returns reflect your personal status at December 31st of the prior year. Whether you indicated that you were married or living common-law, the CRA treats your returns individually.

Question 2) – I forgot to include some donation receipts in my 2010 return. Can I use them in my 2011 return?

Answer – Yes you can.  You are allowed to claim those donations made in the previous four tax years that have not already been claimed.

Question 3) – I made more money than my spouse (partner).  Why can’t I claim the child care expense? It would be more beneficial.

Answer – The lower income earner must always claim the child care expenses, with the following exceptions;

  • The spouse (partner) was a student in attendance at a designated educational institution or secondary school, and enrolled in a full-time or part-time program.
  • The spouse (partner) was certified by a medical doctor to be incapable of caring for children.  There are a number of criteria that pertain to this and you should consult with the CRA to determine your qualification.
  • The spouse (partner) was confined to a prison or similar institution throughout a period of not less than two weeks in the year.
  • You were living separate and apart from your spouse (partner) at the end of the year and for a period of at least 90 days in the beginning of that year because of a breakdown in the marriage or common-law partnership. Again there are additional criteria and the specific situation should be discussed with the CRA for eligibility.

Question 4) – For our family, do we each claim our medical expenses separately?

Answer – No, to get the most of the medical credit, it is better to combine the eligible family medical expenses and have the parent with the lower net income claim the total amount.  The lower net income is determined by looking at line 236 (net income), on the personal tax returns.  The medical amount eligible for the credit becomes effective when the amount exceeds 3% of your net income, or if the medical expenses exceed $2,052.

Question 5) – Since I owe so much tax, will I now have to make installments?

Answer – Possibly, if your net tax owing for 2012 is more than $3,000 and in either 2011 or 2010 you will be required to make installments.  For more information on tax installments, click here. This installment guideline also pertains to HST for annual filers.

If you have unanswered questions concerning your Canadian 2011 tax return (or prior years), I would be happy to try and answer them for you, just connect with me here on the blog, or via the information on my contact me page.

As always, I love getting feedback. Don’t forget to leave a link back to your own blog via the commentluv feature you’ll find here on the site.

Until next time,



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